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Oil in a Week – Arab Energy Security
Published in AL HAYAT on 04 - 12 - 2011

The term ‘global energy security' pertains to many issues related to the security of the environment, water, economy, politics, and the energy sources of a particular country. On the Arab level, the term gains additional connotations, in light of the responsibility and role of the Arab countries in ensuring continuous supplies of oil and gas to the global markets. Other relevant aspects include these countries' capacity to meet the needs of the markets, in the event of sudden supply disruptions, and the ability of Middle Eastern oil-producing nations to resolve their border disputes through diplomatic means, instead of resorting to war.
These days, the term has come to also comprise the balance of power change in the region, especially the possibility that the international oil companies (IOCs), operating in a given country, may conduct themselves in a manner that is in line with the state's laws and sovereignty – instead of these IOCs being given the chance to impose their conditions and interests on oil countries, and meddle in their local policies as it was the case in the past.
Needless to say, the term ‘energy security' has evolved globally in the second half of the twentieth century, and it continues to take on ever new scopes in the present century. The concept of energy security started to figure strongly since the early seventies, with the Arab oil embargo on the United States and the Netherlands in the 1973 war against Israel. Since then, the West has feared a second major interruption of Arab oil supplies. Despite the fact that this has not happened, the repeated regional political unrest has stroked fear in the markets, pushing prices up. The term also started to reflect concerns over the impact of oil consumption on the environment and greenhouse gas emissions, and this has prompted the industrialized countries to gradually resort to alternative energy sources such as solar power, wind power and nuclear energy, albeit to a limited extent so far.
As is known, oil imports, since the beginning of the twentieth century, were accompanied by intervention by major industrialized countries in favor of their respective companies, leading to occupation and domination, not to mention conflict among major nations over control of oil-producing countries. This rivalry continues to exist to this day, as oil has played, for instance, a major role in the invasion of Iraq in 2003. Thus, China is competing today with Western powers to gain a foothold in oil-producing countries (Chinese companies are present in all Arab oil-producing countries and take part in most new oil-related tenders), or in taking advantage of the fact that many Western companies are forced to abandon certain countries, for example as a result of the sanctions on Sudan, where Chinese companies have replaced Western ones.
One should mention that the U.S. State Department recently stepped up its role in international energy agencies, as well as its influence over foreign U.S. energy policy by creating a dedicated department for the purpose.
In the Arab world, energy security means first an increased and sustained supply of oil to the global markets, to meet the high demand despite economic downturns. Energy security also entails efforts by the major oil countries, especially Saudi Arabia, UAE and Kuwait, to build a spare productive capacity, ready to offset any supply shortages in the markets, as happened during the Iraqi invasion of Kuwait in 1990, or most recently in the Libyan revolution. However, with the major political changes taking place in the region, and the increased role of foreign oil companies in local industry, the term can also involve the relationship between states and foreign companies operating on their territories. The best example of this is the ‘crude' manner in which ExxonMobil has dealt with the Iraqi Ministry of Oil, by sidestepping the latter's policies, and even failing to respond to its four letters and inquiries so far, in the context of its agreement with the Kurdistan Regional Government on conducting exploration and drilling beyond the borders of the KRG's territory. So far, the ministry has only had a ‘soft' response, limited to disqualifying ExxonMobil from bidding in the next four tenders. The excuse given by the ministry, that it will take more aggressive steps when ExxonMobil responds to its letters, is therefore nothing but an attempt to save face.
Furthermore, Arab energy security is intimately linked to border disputes among neighboring countries, especially those countries that make important oil discoveries before borders are demarcated. The examples of this are many, most notably of course the former border disputes between Iraq and Kuwait, ] Iraq and Iran, as well as Saudi Arabia and the UAE in the past, and Libya and Algeria. There is also the problem of natural gas discoveries in the eastern Mediterranean, and the attempts by both Israel and Turkey to extend their influence by occupying adjacent areas and flex their military muscles in imposing their conditions on the region's countries or obstructing oil operations in neighboring ones. Thus, Israel prevented the Palestinian National Authority from developing the Gaza Marine field in Gaza's territorial waters; this is in addition to the Israeli attempts underway to gobble up sizeable areas of Lebanese territorial waters in the exclusive economic zone between the two sides. Similarly, there are Turkish pressures on counties in the region with regard to maritime delimitation amongst them, pushing them to factor in Turkish interests, as a result of its occupation of the northern part of Cyprus. This is not to mention internal and regional political disputes, such as the bombings of Iraqi oil pumping stations and pipelines since the occupation of the country in 2003, and the recent suspension of Sudanese oil exports, because of the dispute between the North and the South over transit fees collected by Khartoum after the secession. In addition, there are ongoing Iranian threats of shutting down the strategic Strait of Hormuz and the move by the UAE to build pipelines directly to Fujairah on the Arabian Sea, bypassing the Strait of Hormuz. Finally, there is the initiative by Saudi Arabia and other nations to store crude oil in the Caribbean and East Asia.
Last but not least, Arab energy security also comprises the security of water sources. For one thing, the major rivers and their tributaries in the region all originate in neighboring countries (the Tigris, Euphrates and the Nile), while the Arab Gulf countries rely heavily on the desalination of sea water. But in truth, the biggest problem lies in the wasteful consumption of water, and the lack of water-conservation policies, because of lower water prices compared to international rates.
Today, there are at least five or six Arab capitals that do not receive water from the government on a regular basis, and people there often resort to contracting local distributors to secure water, if they could contact these distributors during peak periods, that is.
*. Mr. Khadduri is a consultant for MEES Oil & Gas (MeesEnergy)


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